While large overseas exports from new coastal terminals and pipelines remain unfulfilled ambitions, traffic in Canadian liquefied natural gas (LNG) is beginning to grow on eastern and western domestic and regional markets.
Eastern Canada distributor Gaz Metropolitain and provincial government agency Investissement Quebec have completed a C$120 million ($90 million) project that tripled Port of Montreal LNG fuel supplies to about 9 Bcf/year.
Quebec Energy Minister Pierre Arcand called the expansion a “key project for Quebec…The distribution of LNG in the northern regions of Quebec will constitute a major asset at both the environmental and the economic levels.”
Within a month, merchant marine conglomerate Groupe Desgagnes increased previous demand for the Gaz Metro sideline from remote mines and towns by launching an LNG-fueled, 135-meter (440-foot) oil, asphalt and chemical tanker, the Damia Desgagnes.
On Canada’s west coast near Vancouver, British Columbia (BC), distributor FortisBC plans to start operating this summer a C$400 million ($300 million), seven-fold capacity increase at its Tilbury LNG terminal to 37 MMcf/d, supported by nearly tripled storage for 1.6 Bcf.
As in Quebec, the BC regional demand growth for LNG is expected to come from new environmentally “clean” marine shipping as well as remote mines, industrial sites and towns that are replacing fuel oil- and diesel-burning machinery and power generation.
British Columbia Ferry Service Inc., a commuter and tourism mainstay service, is acquiring a new class of dual-fuel vessels capable of using natural gas or ultra-low sulphur diesel. Similar innovations by other fleets have prompted California-based Wespac Midstream to propose facilities that would expand the FortisBC operation, a regional marine bunkering hub. The plans indicate the site might eventually become a springboard for LNG exports from BC.
Regional traffic in LNG from the west coast already has a local cross-border dimension.
In Washington state, Puget Sound Energy Inc. (PSE) this spring continued the flow by acquiring a two-year LNG export license from the National Energy Board (NEB). Canadian regulation enables repeated use of such short-term permits, requiring only trade reports for monitoring purposes.
PSE has set a 2019 target date to complete a $310 million Washington counterpart in Tacoma to FortisBC’s evolving Tilbury site. The project would add marine fuel supplies — but no overseas exports — to a 45-year-old regional use of LNG storage as a backup for peak demand periods in the company’s gas utility franchise area. Northwest U.S. gas services lean heavily on imports from BC and Alberta.
In Canada, ambitions to leapfrog into much higher-volume global trade remain live, at least on paper.
While the Royal Dutch Shell plc-led LNG Canada consortium awaits an extended NEB export permit for a delayed start on a 3.7 Bcf/d Pacific Coast terminal, a project on the Atlantic side of the country is going through a corporate rebirth aimed at achieving overseas sales.
Pieridae Energy and Petrolia Inc. announced a friendly merger to form a publicly traded firm dedicated to moving ahead on a formerly private company proposal for an overseas export terminal proposed on the Nova Scotia coast, Goldboro LNG.
No immediate start on construction was predicted, although the project is well advanced through Canadian regulatory processes and has a 20-year sales contract for half its proposed 1.4 Bcf/d capacity with European trading house Uniper Global Commodities. The stock exchange announcement described the Pieridae-Petrolia combination as “targeting the next wave of worldwide LNG production, post 2020.”
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